Summary
The Fifth Circuit reviewed a civil contempt order arising from a preliminary injunction concerning the termination of a nursing facility from the Medicare and Medicaid programs. The court held that the government complied with the injunction because it did not rely on the termination notice to take prohibited action while the injunction was in effect. The court vacated the contempt finding and reversed the district court's judgment.
Topics
Practice areas
Questions Presented
- Whether the government violated the preliminary injunction by failing to make full payments for services provided during the injunction period.
- Whether the government violated the preliminary injunction by discontinuing Oaks's access to the Medicare electronic billing system after the injunction expired.
- Whether the government violated the preliminary injunction by issuing a zero-dollar tentative adjustment on Oaks's 2010 cost report while the injunction was in effect.
- Whether the district court properly held the government in civil contempt.
Holdings
- The government complied with the injunction by maintaining the preexisting payment status quo; the injunction prohibited refusing payment on the basis of the termination notice but did not require full, nonpreliminary payment for services.
- The government did not violate the preliminary injunction by cutting off Oaks's electronic billing access after the injunction was no longer in force.
- Oaks failed to prove that the fiscal intermediary's zero-dollar tentative adjustment violated the injunction.
- The district court abused its discretion by holding the government in civil contempt; the Fifth Circuit vacated the contempt finding and reversed the judgment.
Key quotations
“Because the government did not rely on the Notice while the injunction was in effect, we REVERSE the contempt order.” (slip op. at 2)
“Thus, to violate the requirements of that injunction, the government had to act “on the basis of” the Notice—the Notice, in other words, must have caused the government to act differently than it would have otherwise.” (slip op. at 6)
“With the benefit of a clearer explanation than was given the able district court, we are persuaded that the government complied with the preliminary injunction while that injunction was in effect.” (slip op. at 8)
Factual background
CMS determined that Oaks, a nursing facility, was no longer eligible to participate in the Medicare and Medicaid programs and issued a notice stating that its provider agreements would terminate on May 9, 2010. The district court enjoined the government from terminating the agreements or taking action on the basis of that notice, and the parties agreed that the preliminary injunction expired on June 16, 2011; a temporary restraining order expired on July 8, 2011. Oaks later alleged that the government failed to pay certain amounts, cut off its electronic billing access, and refused payment for services, leading the district court to enter a compensatory contempt order.
Procedural history
CMS notified Oaks that its Medicare and Medicaid agreements would terminate effective May 9, 2010. Oaks sued in the Middle District of Louisiana, and the district court preliminarily enjoined the government from terminating the agreements or taking action on the basis of the termination notice. After the injunction and a later temporary restraining order expired, Oaks sought contempt sanctions, and the district court ordered the government to reimburse Oaks $704,728.18. The Fifth Circuit vacated the contempt finding and reversed the district court's judgment.
Remand instructions
The finding of contempt was vacated and the district court's judgment was reversed; no further remand instructions were stated.